Lyxor has expanded its fixed income range with the launch of Europe’s first euro government green bond ETF.
The Lyxor Euro Government Green Bond UCITS ETF is listed on Euronext Paris with a total expense ratio (TER) of 0.20% while further listings will follow on Deutsche Boerse, London Stock Exchange and Borsa Italiana in the next few weeks.
The ETF will track the Solactive Euro Government Green Bond index which offers exposure to investment grade green bonds issued by eurozone countries.
To be eligible for inclusion, bonds must be approved by the Climate Bonds Initiative, have at least €300m outstanding and one-year maturity and be denominated in euros.
According to data from Lyxor, some $97.7bn of sovereign green, sustainability and social bonds had been issued by 22 countries across Europe, as at the end of 2020.
François Millet (pictured), head of ETF strategy, ESG and innovation at Lyxor, said: “Until today, a strong and diversified sovereign segment was the missing link in the green bond market.
“We have now reached a point where any investor can and should have a green bond strategy as part of a fixed income portfolio.
“This launch will help investors pursue their net-zero carbon objectives by giving them more clarity on the use of proceeds of their investments, including in their core sovereign bond allocation.”
The firm currently offers the largest green bond ETF on the European market, the €577m Lyxor Green Bond UCITS ETF (CLIM).